Crypto Exchange Coinbase Reaches $100 Million Settlement with New York Regulators

Cryptocurrency exchange Coinbase has reached a $100 million settlement with New York regulators, agreeing to pay a $50 million fine for letting customers open accounts with poor background checks, and another $50 million to improve compliance.

Regulators accused Coinbase of violating anti-money-laundering laws when it allegedly allowed customers to open accounts without conducting sufficient background checks, and has therefore agreed to pay regulators $50 million in a settlement with the New York State Department of Financial Services, according to a report by the New York Times.

The settlement will also mandate that Coinbase invest $50 million to strengthen its compliance program, which is supposed to prevent drug traffickers, sellers of child pornography, and other possible lawbreakers from opening accounts with the company, the report added.

The Coinbase settlement is just the latest hit on the cryptocurrency industry, as several crypto firms have filed for bankruptcy over the past year, the most notorious of them being FTX, which suffered a stunning collapse in November.

Late last year, disgraced FTX founder and Democrat super donor Sam Bankman-Fried told investors that the company was facing a major shortfall of up to $8 billion from withdrawal requests and needed emergency funding.

Shortly after that, FTX filed for bankruptcy, and Bankman-Fried announced his resignation, adding that Alameda Research would be shutting down. He then put his 12,000-square ft. penthouse in the Bahamas up for sale.

In just the course of one week, Bankman-Fried went from having an estimated net worth of $16 billion to being completely broke, with Bloomberg calling the incident “one of history’s greatest-ever destructions of wealth.”

The company’s new CEO John Ray, III later revealed several wild items found in the bankruptcy filing, which included Bankman-Fried allegedly lending himself $1 billion, as well as FTX corporate funds being used to buy personal homes, among other things.

Bankman-Fried and other top FTX executives are now facing federal criminal charges. On Tuesday, the disgraced FTX founder pleaded not guilty in a New York court, and asked the judge to keep his bail guarantors a secret.

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